Review: Startup Myths and Models by Rizwan Virk

Type “Startup” into Amazon book search and you’ll get over 20,000 hits. In this crowded field, the path to producing a work of value is an epic journey. In Startup Myths and Models by Rizwan Virk, the author uses elements of legendary journeys to breathe life into his personal stories of building a business from the ground up. Riz has over 25 years of experience as an entrepreneur, investor and author, all of which offers clarity, insight, and in some cases personal life coaching for the nascent entrepreneur.

The cover illustration hints at the key role of the Startup Model Lifecycle, used throughout the book to help entrepreneurs understand how their decisions are intimately connected to the phase their business is in. The text is organized according to the 6 main stages of Joseph Campbell’s Hero’s Journey, with standard business school models and common myths appearing along the way. As the title implies, it is the myths – those accepted rules of thumb that can also become a mental trap – that form the central theme distinguishing the book from others in this category.

Myths about starting a company are gathered together in the first stage, The Call to Adventure. Here tales like Star Wars and The Hobbit illustrate some of the motives for beginning an adventure. Riz tells the story of his own personal experience while working at Lotus Development, where he recognized and took advantage of a line of business his employer was not addressing. Several common early stage myths are addressed with present-day examples. There are also early warnings that the journey may not end up as expected and yet still be worth the effort.

There is evidence in this first section that the author is empathetic to the personal as well as the business elements of a startup. Selecting co-founders is likened to dating before getting married, but it will take a lot of self-awareness to use the book’s tools in this section effectively. Spouses and significant others are included in the discussion, emphasizing that starting a company can be an all-consuming life journey for everyone involved.

Luke needed a lightsaber before beginning his quest, and so will the epic journey of a startup require resources – most notably money. A major pitfall for beginning entrepreneurs is a lack of awareness of the strings that are attached to most investments. In the second stage – Fuel for the Journey – the book tackles some of the different ways that founders and investors view fundability. Examples from Riz’s own experience in mobile gaming are combined with advice from well-known investor Randy Komisar. Entrepreneurs are warned that VC’s are basically just looking for reasons to say no; a good link from Sarah Downey of Accomplice further illustrates the point.

Legendary journeys always involve memorable companions (R2D2 and C3P0 come to mind) who will accompany the hero and prove essential at the proper moment. Danger lurks with those who seem compatible in the beginning, but later turn out to have their own agenda. In this section - Travel Companions - we encounter the business model’s four quadrants of hiring, based on the range of experience and cultural fit that often vexes hiring managers. The importance of balancing micro-managing (which isn’t always bad) and leadership/mentoring is illustrated by analogy with Siddhartha’s sitar string; if strung too tight, it snaps but if too loose, it makes no music. The value of good management is illustrated by the example of Riz’s own company, Brainstorm Technologies, which did well when run haphazardly by him and his friends and then ultimately became a well-run failure when an outside CEO arrived.

Once the management myths have been busted, the book moves on to The Road of Trials. Napoleon summarized this section best when he remarked that no battle plan survives an encounter with the enemy. Here the author warns that hyper-focus can lead one to miss an excellent opportunity that is lurking nearby. From experience, he suggests paying less attention to vision and more to serendipity. The secret to busting the “Fail Fast, Pivot Quickly” myth according to Riz is to fail slowly and pivot carefully. He illustrates this point with two examples - Gnip, which pivoted, and Life360, which did not.

A fundamental motive for any entrepreneur is examined in Acquiring the Treasure. Luke knew right from the beginning he was going to rescue the Princess but with a startup, the treasure and how to get it often isn’t known until the journey’s end. One of the most enduring exit myths of all is that the long hard work of the startup culminates in a glorious shower of money known as the IPO. The author busts this myth, noting that only about 10% of successful tech journeys culminate in an IPO, while the remainder end with acquisition of the company. The Startup Model Lifecycle is the foundation for Riz’s secret in determining a business’s worth. This section includes a spreadsheet to help sort out the underlying reasons for the acquisition, both logical and emotional. The author’s own experience selling Gameview is a compelling example; only later did he realize he could have gotten more had he known that the buyers were not seeking revenue alone.

One appealing element of this book is the recognition that life is in session during any startup journey. The myths arising from the personal experiences in startup land are collected in the final section, The Underworld and the Return. Riz reminds us that startups are riddled with human emotions like hope, fear and greed, and warns how the dark times can bring these out. It is important to be prepared for how the journey will change you, and to remember that what comes afterward is just as important to your well-being as the journey itself. Advice from experts like Brad Feld and Alex Haro suggests that we are not alone in this journey and we must manage expectations and explore options on a regular basis.

Myth-busting raises tough questions, and the blunt yet unsatisfying answer is often “it depends.” Riz uses his clear writing style with numerous examples, enthusiasm for entrepreneurship, and stories invoking intuition and personal reflection to guide the reader through the journey while building interest as the book progresses. The mythological characters and themes aren’t always universal – if you are not familiar with Dungeons and Dragons or Magic the Gathering some won’t mean as much. The partially revealed Bonus Myths were a bit of a distraction at first; it seems like the universal myth of starting something you are passionate about could have received more attention in the main text. On the other hand, the myths related to valuation of a company do seem better suited to an external reference.

Startups operate in an unpredictable environment where experience and self-reflection are essential for survival. In each stage of the journey, Riz blends his own unique style of myth-busting with classical business school models and hard-won experience to both entertain and inform the reader.

Author Profile - Paul W. Smith - leader, educator, technologist, writer - has a lifelong interest in the countless ways that technology changes the course of our journey through life. In addition to being a regular contributor to NetworkDataPedia, he maintains the website Technology for the Journey and occasionally writes for Blogcritics. Paul has over 40 years of experience in research and advanced development for companies ranging from small startups to industry leaders.  His other passion is teaching - he is a former Adjunct Professor of Mechanical Engineering at the Colorado School of Mines. Paul holds a doctorate in Applied Mechanics from the California Institute of Technology, as well as Bachelor’s and Master’s Degrees in Mechanical Engineering from the University of California, Santa Barbara.